Bailout legislation not dead yet, central Illinois lawmaker says

Even though the U.S. House of Representatives on Monday rejected a $700 billion plan to bail out the struggling financial industry, the issue isn’t dead, said U.S. Rep. Phil Hare.

Adriana Colindres

Even though the U.S. House of Representatives on Monday rejected a $700 billion plan to bail out the struggling financial industry, the issue isn’t dead, said U.S. Rep. Phil Hare.

“Now we just have to go back and try something else,” said Hare, D-Rock Island, who was one of 205 House members who voted “yes” on the bailout, compared with 228 who voted against it. “At the end of the day, we have to do something.”

“We’ll keep working until we get something done,” he added.

One possibility would be for House Democrats to muscle through a bailout plan without Republican support, but it’s unclear how the Senate would react to such a move, Hare said.

He favors rewriting the proposal in a way that would let judges spell out certain conditions to let bankrupt homeowners stay in their foreclosed homes.

The bailout legislation that the House voted on Monday was “tremendously improved” over what previously had been discussed, Hare said. The revised version, hammered out over the weekend, included strict independent oversight provisions and limits on executives’ compensation.

The added provisions are what led U.S. Rep. Ray LaHood, R-Peoria, to vote for the bill, too.

“I think they’ve made some significant changes, particularly limiting compensation for CEOs of banks and mortgage companies and also limiting golden parachutes for people walking out the door so they can’t walk out with a huge amount of money,” he said.

Shortly before the House vote, LaHood called the proposal a “workable plan” that has been reviewed by “some of the best minds in America.”

“I don’t consider it sort of a wing and a prayer,” he said.

Central Illinois hasn’t been hit with any bank failures, but “we’re not immune from that happening,” he said. The bailout plan “will give confidence to the market. I think it will give confidence to investors. I think it will give confidence to the American people.”

U.S. Rep. John Shimkus, R-Collinsville, opposed the bailout Monday and issued a statement explaining his stance on the measure, which he called “both bad government and bad for taxpayers.”

“The free market system can deal with the crisis on its own,” Shimkus said. “The free market system is not compassionate, but it is the quickest way to turn an economic crisis around. Banks, mortgage brokers and Wall Street investors who hold worthless assets should not ask taxpayers to assume their debt.”

Adriana Colindres can be reached at (217) 782-6292 or adriana.colindres@sj-r.com.